I read an interesting article that appeared in Supply Chain Game Changer that talks about the success and failures of Procurement.
The writer identified three key areas that is crucial in Procurement namely Leadership, People System & Governance Process and Looking Beyond Savings. If any one of these areas is not in good functional mode, then Procurement suffers a debilitating failure.
Based on my experience the Leadership, People and Innovation that will be the crucial foundation for Procurement to thrive in this age of rapid changes. Leaders with clear vision and purpose is what is lacking in many organizations that abjectly focus on run of the mill nickel and dime savings.
In this super charged technologically driven world of innovation, Procurement is excellently positioned to step up and lead to bring and create value for any organization.
Beating the dead ‘horse of savings’ out of the suppliers does not in any way encourage the suppliers to step up and forthcoming in his own way to support sharing the secret ‘sauce’ innovation.
The suppliers more that anyone is in the forefront to embrace innovation and the right collaboration based on mutual trust will lead to ground breaking value for Procurement drive and embrace. Only a leader with commercial mindset and collaborative mindset who values relationship building can bring the right focus for success.
I totally in agreement with the suggestion that more often than not appointing the wrong type of leader without basic understanding commercial mindset, inexperienced, lack of understanding of real business imperatives & value creation not value extraction (read drive savings) are the norm in many companies.
We now come to the oft quoted Jim Collins’s seminal work, Good to Great, on getting the right people as one of the key foundations to success is timeless. However, what about those existing employees in the organization with fixed and victim mindset or thinking that the company owe them a living is an antithesis to everything positive to disguise their own limitation and weaknesses? These employees must be managed in such a way that they are not a blocker in the company’s progress. We should never discount the damage that they can wreak an organization’s progress. Again, a leader with empathy and people management skills are an asset to motivate, encourage and able to make the tough and difficult decisions.
Therefore, in the nutshell the time is ripe for Procurement to lead and getting the right leader with an outward mindset with clear purpose and wear innovation as badge of honour on his/her sleeves will stand in good stead.
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Sudhakaran Ayyappan is a Contracts and Procurement professional with 15-years’ experience managing procurement and overall 28-years working experience in oil refining business. His hands on experience puts him is unique position as a trainer that understands the business needs and objectives, market movement and the latest in procurement and supply chain related trends.
He specializes in contracts, purchasing, material management, warehousing, negotiations, coaching, Train The Trainer (in-house trainer), contract management, contract and procurement auditing, leadership and management. His vast experience in oil and gas has exposed him to wide array of category management for static equipment, rotating equipment, pipes, valves, flanges, tank seals, engineering and maintenance services as a regional Procurement Manager with Shell Malaysia Trading supporting refineries in Malaysia, Singapore and the Philippines.